Occupational Attainment and Earnings: The Case of the Disabled

Abstract. This paper offers, for the first time, an investigation of wage differentials between disabled and non‐disabled workers in Sweden. It extends the traditional wage decomposition by incorporating explained and unexplained differences in occupational attainment. Data from the Swedish Level of Living Survey for 1981 and for 1991 have been used. The results show that in both years the disabled worked in low‐level occupations to a greater extent relative to the non‐disabled. This is due to the fact that disabled workers have lower qualifications. The unexplained component due to differences in returns on wage determinants is insignificant in the 1981 case but is highly significant in 1991, constituting around 50–60 per cent of the average log wage differential.